Generating Shareholder Value Shell sr21

SUSTAINABILITY AT OUR CORE VALUES ACHIEVING NET-ZERO RESPECTING NATURE POWERING LIVES GENERATING OUR PERFORMANCE
SHELL EMISSIONS SHAREHOLDER DATA

VALUE
We are continuing to provide the energy the world needs today, while increasing our investments in cleaner energy.
GENERATING SHAREHOLDER
VALUE
Our Powering Progress strategy generates value for our shareholders. It provides the
financial strength to transform our company as the world makes the transition to cleaner
energy.
60 OUR BUSINESS ACTIVITIES

61 EMBEDDING SUSTAINABILITY INTO PROJECTS
62 PRODUCING OIL AND NATURAL GAS
63 NON-OPERATED VENTURES
63 DIVESTED VENTURES
59 Shell Sustainability Report 2021

VALUE
OUR BUSINESS ACTIVITIES
Energy
use
Customer
sectors
Mobility Residential Marine Aviation Agriculture Commercial Industrial Commercial

and forestry road transport
SUPPORTING THE DELIVERY OF INTEGRATED ENERGY SOLUTIONS
Energy
solutions
Fuels Lubricants Chemicals Biofuels Electricity Hydrogen Natural gas Gas-to-liquids
Value enhanced by trading and optimisation
Energy and chemicals parks LNG and GTL Transport Power

Carbon offsets
Assets and
People
capabilities
Renewables Oil Gas Biomass
Technology and operational excellence
 More in this report Our Powering Progress targets | Letter from the CEO
 More on Shell websites Powering Progress – transitioning to net-zero emissions

VALUE
EMBEDDING SUSTAINABILITY INTO PROJECTS

Safety and the impact of our activities on the environment and communities are vital considerations when we plan, design and
operate our projects and facilities. The mandatory requirements in our Health, Safety, Security, Environment and Social
Performance (HSSE & SP) Control Framework help to ensure projects and facilities are designed and constructed safely,
responsibly and in a consistent way.
At a project level, assessing climate-related risks is an important part of making initial investment decisions. Projects under
development that are expected to have a material greenhouse gas impact must meet our internal carbon performance standards
or industry benchmarks. This indicates that they will be able to compete and prosper in a future where society aims to limit
overall carbon emissions.
We require projects and facilities that we operate to have a greenhouse gas (GHG) and energy management plan in place if
they are expected to produce, at peak, more than 50,000 tonnes of carbon dioxide equivalent emissions. We focus
improvement efforts on the most carbon-intensive projects, monitoring performance against applicable standards and running
carbon competitiveness reviews to help us continue to improve. We conduct impact assessments for every major project and
consider the economic, social, environmental and health opportunities and risks.
Read more about how we embed sustainability into the life of a project at www.shell.com/sustainability.
Read about our major projects at www.shell.com/about-us/major-projects.
DECOMMISSIONING AND RESTORATION

Decommissioning is part of the normal life cycle of every oil and gas structure and we work hard to do it safely and responsibly.
This includes restoring the surroundings of onshore and offshore platforms and facilities in line with relevant legislation, while
taking our own environmental standards into account.
We have decommissioning activities under way in Brunei, India, Malaysia, the Netherlands, the UK and the USA. We seek to
reuse, repurpose and recycle materials in decommissioning. At the end of 2021, we reported $22.1 billion on our balance sheet
for current and non-current decommissioning and other provisions, which is how we account for future decommissioning expenses
(see our Annual Report).
Read more about Shell’s approach to decommissioning at www.shell.com/sustainability/decommissioning-and-restoration.

VALUE
PRODUCING OIL AND NATURAL GAS
POWERING PROGRESS
We believe our annual oil production peaked in 2019, and we expect our total oil production to decline by 1-2% a year until
2030.
The most ambitious scenarios show that as the energy system transitions, the world will continue to need oil and gas for decades.
We are focusing our Upstream activities on fewer, existing positions and on generating value over volume.
We expect an annual decline in oil production because we are reducing the level of our investment in Upstream production
activities. Emissions from our Upstream operations make up a small proportion of our overall Scope 1 and Scope 2 emissions,
and they have already reduced by more than 25% since 2016.
Natural gas, piped and liquefied natural gas (LNG), provides lower-carbon energy. The IEA estimates that global natural gas
operations have an average methane leakage rate of 1.7%. At this rate, natural gas emits over its life cycle around 45% lower
greenhouse gas emissions than coal when used to generate electricity. Natural gas can also make a significant contribution to
lowering greenhouse gas emissions in industries, such as the iron and steel sector, where switching to natural gas from coal could
lead to around 36% lower emissions.
Read more about our oil and gas production volumes in the Annual Report.
Read about our major projects at www.shell.com/about-us/major-projects and deep-water production at www.shell.com/
energy-and-innovation/deep-water.
Read more about natural gas at www.shell.com/energy-and-innovation/natural-gas.
SHALE OIL AND GAS

We work to unlock shale resources safely and responsibly through strict adherence to our Onshore Operating Principles of
Safety, Air, Water, Footprint and Community. We conduct our operations in a manner that aims to protect air quality and reduce
emissions. For example, we are implementing greenhouse gas abatement projects for existing and new facilities, such as using
renewable power supply and energy efficiency improvement initiatives.
In September 2021, we reached an agreement for the sale of our shales business in the Permian Basin, USA. The transaction was
completed on December 1, 2021, transferring Shell’s interest in the Permian to ConocoPhillips. As a result of this divestment,
Shell's remaining activity in shales production is in Canada and Argentina.
Read more about our shale oil and gas production at www.shell.com/energy-and-innovation/shale-oil-and-gas.
ARCTIC
We do not plan to pursue new oil exploration leases offshore in the Arctic Circle. We hold interests in a small number of
exploration licences in Arctic areas of the USA, Norway and Russia. We evaluate other opportunities on a case-by-case basis, in
line with our strategic objectives.
We intend to exit our interest in the Gydan joint venture with Gazprom Neft (Shell interest 50%) to explore and develop blocks
in the Gydan peninsula, in north-western Siberia. The project is in the exploration phase, with no production.
Read more about our activities at www.shell.com/sustainability.

VALUE
NON-OPERATED VENTURES
Shell often works in joint ventures with national and other international energy companies. More than half of Shell’s joint
ventures are not operated by Shell.
When entering into a venture operated by a partner, we require them to agree to and adopt key principles, policies and
standards, including the Shell Commitment and Policy on Health, Safety, Security, Environment and Social Performance (HSSE &
SP), or one equivalent to our own.
For more information about how we work with our joint ventures, see www.shell.com/sustainability.
 More in this report Sustainability at Shell | Our standards and policies | Letter from the CEO
DIVESTED VENTURES
Responsible divestments are a key part of transitioning our portfolio to deliver upon our Powering Progress strategy. In 2021,
total divestment proceeds were approximately $15 billion. See the business sections in our Annual Report 2021 for details.
We carry out due diligence on potential buyers when divesting parts of our business. We collaborate with both in-house and
external experts, where appropriate, to conduct checks and examine key attributes of potential buyers.
Find out more about how we divest at www.shell.com/sustainability.
 More in this report Sustainability at Shell | Our standards and policies | Letter from the CEO

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SUSTAINABILITY AT OUR CORE VALUES ACHIEVING NET-ZERO RESPECTING NATURE POWERING LIVES GENERATING OUR PERFORMANCE

SHELL EMISSIONS SHAREHOLDER DATA

60 OUR BUSINESS ACTIVITIES

59 Shell Sustainability Report 2021

OUR BUSINESS ACTIVITIES

Mobility Residential Marine Aviation Agriculture Commercial Industrial Commercial

SUPPORTING THE DELIVERY OF INTEGRATED ENERGY SOLUTIONS

Value enhanced by trading and optimisation

Energy and chemicals parks LNG and GTL Transport Power

Renewables Oil Gas Biomass

Technology and operational excellence

60 Shell Sustainability Report 2021

EMBEDDING SUSTAINABILITY INTO PROJECTS

DECOMMISSIONING AND RESTORATION

61 Shell Sustainability Report 2021

PRODUCING OIL AND NATURAL GAS

SHALE OIL AND GAS

62 Shell Sustainability Report 2021

63 Shell Sustainability Report 2021

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